G.R. No.

173211 : October 11, 2012

HEIRS OF DR. MARIO S. INTAC and ANGELINA MENDOZA-INTAC, Petitioners, v. COURT

OF APPEALS and SPOUSES MARCELO ROY, JR. and JOSEFINA MENDOZA-ROY and
SPOUSES DOMINADOR LOZADA and MARTINA MENDOZA-LOZADA, Respondents.

MENDOZA, J.:

FACTS:

During the lifetime of Ireneo Mendoza (Ireneo), he executed a deed of absolute sale involving a
property located in Bagong Pag-asa, Quezon City in favor of spouses Angelina and Mario Intac
(spouses Intac). Consequently, TCT No. 242655 was issued in favorof the spouses Intac. The
deed was executed because the spouses Intac needed to borrow the title of the property and to
use the same as collateral for their loan application.

Respondents Josefina Mendoza-Roy and Martina Mendoza-Lozada, heirs of the late Ireneo,
sought the cancellation of TCT No. 242655 claiming that the sale was only simulated, and
therefore, void.

Both the RTC and the CA declared that the deed of absolute sale was null and void and ordered
the cancellation of TCT No. 242655.Hence, this present recourse.

ISSUE: Whether or not the deed of absolute sale was a simulated contract or a valid
agreement?

HELD: The Court finds no merit in the petition.

CIVIL LAW: simulated contract

Accordingly, for a contract to be valid, it must have three essential elements: (1) consent of the
contracting parties; (2) objectcertain which is the subject matter of the contract; and (3) cause of
the obligation which is established. In a contract of sale, its perfection is consummated at the
moment there is a meeting of the minds upon the thing that is the object of the contract and
upon the price. Consent is manifested by the meeting of the offer and the acceptance of the
thing and the cause, which are to constitute the contract.

If the parties state a false cause in the contract to conceal their real agreement, the contract is
only relatively simulated and the parties are still bound by their real agreement. Hence, where
the essential requisites of a contract are present and the simulation refers only to the content or
terms of the contract, the agreement is absolutely binding and enforceable between the parties
and their successors in interest.

In absolute simulation, there is a colorable contract but it has no substance as the parties have
no intention to be bound by it. The main characteristic of an absolute simulation is that the
apparent contract is not really desired or intended to produce legal effect or in any way alter the
juridical situation of the parties. As a result, an absolutely simulated or fictitious contract is void,
and the parties may recover from each other what they may have given under the contract.

In the case at bench, the Court is one with the courts below that no valid sale of the subject
property actually took place between the alleged vendors, Ireneo and Salvacion; and the
alleged vendees, Spouses Intac. There was simply no consideration and no intent to sell it.

Petition is DENIED